Challenging assumptions about how we live on the earth and protect our environment.

21 January 2014

Can Crowdfunding Help Cleantech Ride the Big Data Wave?

"Big data is a coming wave of 'green gold,'" says
Nick Eisenberger of Pure Energy Partners."Information technology will be
the most powerful tool to address resource challenges in our lifetime."

Eisenberger was speaking at the Markle Foundation offices in
New York, where Agrion, which bills itself as the global network for energy,
cleantech and corporate sustainability, convened an impressive roundtable to
talk about advances in funding new ideas and uncovering innovation for energy and sustainability.

"Energy is where the most data is," said Clean.Data.Project's Jon Roberts. And the panelists agreed its where the most opportunities are in energy, improving its generation, use, and efficiency. Yet not all the necessary datasets are open.

"The biggest obstacle is generational,"
Eisenberger claimed. "The older generation, my generation, is not comfortable
with the 'open' in open innovation."

Richard Robertson explained how GE Ventures has invested in
Quirky, a crowdsourcing platform for inventors, and has turned to the crowd for
help with design and product naming.

The innovation is out there, Robertson suggested.

"Sungevity has an incubator in their Oakland facility, and Solar Mosaic [the crowfunding platform] is in that incubator,” said
Robertson. “Mosaic is looking at not just solar projects, but wind, energy
storage. They're putting projects in the ground."

At least one audience-participant in the Agrion
session, a project finance expert, called into question some of the deals Mosaic and others are funding and the
stated returns listed on the Mosaic site. "We wouldn't fund those
projects," he offered. "It's like charity."

But that's precisely the point made by Mosaic and
others, such as alternative financing renewable energy companies SolarCity, SunRun,
and United Wind, among others. They are there to fund the deals no one else
will, deals that aren't big enough for the big banks, which is a pretty good
sized niche.

That is, in fact, why these new models exist.

For those not familiar with the Mosaic model: projects are listed on its online marketplace, which allows investors pick
projects to fund and then provide the capital for rooftop solar installations. The investors are repaid once the project is up and
running and generating electricity. Their first projects were mostly on
affordable housing in California.

The company provides capital to developers at about 5.5
percent and collects a 1 percent fee, according to some sources, returning roughly 4.5 percent.

“To rapidly deploy clean energy, the industry needs access
to low cost capital and lots of it,” Mosaic co-founder, Billy Parrish, told
Bloomberg News last year. “We are able to source capital from the crowd and
lend that capital to clean-energy developers at lower interest rates than
they would get from banks.”

Platforms like Mosaic, which seek a large, “democratic”
community of engaged funders, as opposed to the elite accredited few, got a
boost last year when the SEC released its proposed guidelines about crowdfunding as it
relates to the Jumpstart Our Business Startups or JOBS Act.

If the admittedly hand-picked crowd at the Agrion session is
any indication, crowdfunding is here to stay.

However, as several roundtable participants
suggested, it may be best deployed as part of a mix of financing options.

About The Green Skeptic

Scott Edward Anderson is the founder of the popular
blog, The Green Skeptic. A cleantech investor and
entrepreneur, he founded VerdeStrategy, and is currently a director with EY's (Ernst & Young) global power & utilities group. Scott has held management positions with Ashoka and The Nature
Conservancy and is co-founder of the Cleantech Alliance Mid-Atlantic.An award-winning poet, Scott is the author of FALLOW FIELD (2013) and WALKS IN NATURE'S EMPIRE (1995). He was a John
Sawhill Conservation Leadership Fellow, a Senior Fellow with the Environmental
Leadership Program, and a frequent commentator on Fox Business Network's Varney & Company.

Welcome to The Green Skeptic

The Green Skeptic is devoted to challenging assumptions about how we live on the earth and protect our environment. We have four focus areas: clean tech innovations and investing, global climate change, entrepreneurism, and microfinance.

Watch The Green Skeptic on FOX Business

Twitter Updates

What Others Say About The Green Skeptic

"If you are into the green thing and dig the written word, Green Skeptic is the blog for you. Scott is passionate about conservation and has an awesome command of his craft."-Hitchhiker's Guide to the Blogosphere